can the ecb afford to stop? drowning is now to help answer that, -- joining us now to help us answer that. sophia let me take this question to you. has the ecb done enough? sophia: i think it's can potentially afford to do now. it is so focused on the worsening economic outlook. we did see hard data in germany and france follow sort of expectations and also there is pmi's. really pointing to a weak economy. that to me suggests while the ecb still has work to do, it might afford to wait until the next meeting. it might not be a september hike. there are still so much work to be done on the inflation front. i do think the job for the ecb has become harder. alix: when i saw the inflation numbers i was like, they are hiking. then i saw the market and comments. this is a different story. how would you answer the question that central banks done enough? sofia: i do not think they have. they are concerned about the economic outlook. there also concerned about stubborn inflation i will look at the problems with a slight

what will the ecb do with that? maria: this is now a mega data-dependent central bank so they look at every piece of data. you referred to some softer economic data. a lot of it dismal. we had the highs which did not paint a good picture for the european economy. at the same time this is a central bank but as a single focus on inflation. the question, this is fundamentally the question of the european governing council. we know inflation is falling. the new records we saw we see inflation has come down. the actual question and the decision hinges on this, is whether inflation has cooled down enough to merit a pause in this hiking cycle. when you look at the data from spain, picked up from germany. still a stubborn number not able to break below the 6% inflation that would give some reasonable arguments to the councils, members said they were not sure about the direction to still see that hike -- still say the hike in september should be on the table. last week we saw some of that potential hike being removed. when y

ecb president christine lagarde will also take center stage today in wyoming as ecb governing council member warrens it is too early to consider pausing. >> when you talk about monetary policy, what i said is we have to be stubborn, even more stubborn than inflation. this is our mandate. we have to bring inflation down to 2%. lizzy: donald trump turns himself in, booked on charges to overturn the 2020 election result in georgia, posting his own mugshot on social media. happy friday, you made it to the end of the week, and investors are nervous this morning. all eyes on jackson hole ahead of jay powell's speech after 3:00 p.m. london time. two year treasury yields back above 5%, and markets asking if this week's dismal data, the new narrative is high for longer rather than higher for longer. there are worries about hawkishness from powell. it is risk on risk off on equities after an ugly close yesterday. the nasdaq had its worst day in three weeks, dropping 2.2%. asian stocks followed wall street lower. the ai buzz is short-lived. we saw short jump for nvidia early in the week. nasdaq

the ecb will come first in -- cut first in september. the market thinks -- the market is counting on a cut from the fed. it's difficult to say because what would prompt the fed to do that? the ecb, we are already seeing evidence of weakness. mike was talking about germany. is that the way to go? is fiscal policy may be a better way to do it? will inflation be done by the time the market is expecting this? i think it is a dangerous thing to expect. as the market is starting to trade interest rate cuts when were not pass this inflation. guy: we are back to being whipped around to narratives in different directions. thank you very much. of course are international economics editor mike mckee in jackson hole. looking forward to the coverage tomorrow. next, ann-katrin peterson joins us next from blackrock. this is bberg. ♪ >> re-acceleration could put upward pressure on inflation, stem the disinflation we are seeing and instead delay plans for the fed to change policy. guy: that was the former st. louis fed president jim bullard speaking on t

this is how we have been operating at the ecb.that monetary policy is really european monetary policy is a plus. we are bound up by the same currency. we exchange the same banknotes. host: that was the ecb president christine lagarde speaking exclusively to bloomberg's tom kean. maria tadeo will bring us analysis. that was a wonderfully paradise conversation but -- that was a wonderfully erudite conversation but did we get any more clarity on policy? >> the short answer is no. i don't think that was the goal. in the interview we played with tom, there was almost an intellectual flared of the conversation. if you look at the speech and i would recommend everyone does this is almost a step back from the daily tribulations with the economy. but also look at the economy with the bigger picture. she identified big changes happening in the economy. the labor market. she said there are significant changes in the labor market. energy security has been a huge point of debate when it comes to the european story and even the inflation story

what do you reckon the ecb will do? ., . ~ future. what do you reckon the ecb will do?ikely _ will do? on balance i think it is more likely they _ will do? on balance i think it is more likely they stay _ will do? on balance i think it is more likely they stay on - will do? on balance i think it is more likely they stay on hold l will do? on balance i think it is| more likely they stay on hold in september, because other data are showing that the economy is losing significant momentum. we are seeing that unemployment is no longer falling, leading indicators suggest that the eurozone economy will perform much more poorly in the next few months than the european central bank had expected earlier. so if the ecb revises down its forecast for growth in september as they most likely going to have to do significantly, then the chances are that they will be on hold but it is a finely balanced decision. where is the concern — a finely balanced decision. where is the concern was _ a finely balanced decision. where is the concern was focused? - a finely balanced decision. where is

within sight near the peak of the interest rates for the ecb.itch rating is saying it expects inflation in the eurozone will fall to around 4% by the end of the year 4% is a figure for the end of the year ecb will probably not need to raise its near-term inflation forecast further in the month of september. quick reminder of what the ecb had said in the previous meeting was it would see inflation fall from the current 5.4% this year to 3% in 2024 and 2.2% in 2025 fitch then saying the ecb will probably not need to raise its near-term inflation forecast further when it has the next meeting in september those are the latest data points coming out from fitch. >> fascinatifascinating. >>> coming up on the program, fallout from the fitch u.s. downgrade continues. we have the latest on the investors and how they are trading treasuries after this break. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for

to the point that probably won't dissuade the ecb from another rate hike.the fed the same way. given a lot of constructive data we've seen on inflation as well as the economy. we think the fed will pause in september but i don't think another rate hike is off the table in november. overall maybe one more rate hike. and then a sustained pause. guy: -- alix: do you think the china factory significantly priced in the markets, data we've seen and china not at 5% is already it. alejandra: thinking about it more from a global perspective, i think people -- investors are starting to realize. people were expecting over 6% growth in china. i did not see that happening. i still think it will be close to target. the government does not want to over stimulate. the debt and property market it had before. going to what it means for the local economy i think it's important to point out china is still likely to grow faster this year than it did last year. when you think about the overall contribution to global growth and the impact on the european economy it's not as bad a

torsten: the next ecb meeting will be a cliffhanger.de did not commit to hiking or staying on hold. inflation data being on hold. we get france cpi data tomorrow. all of that is important -- is pointing to an -- inflation data in europe being sticky. those of course have to do with wage inflation being more slow because of the trade union bargaining process. broadly speaking that process of inflation hanging higher for longer, that is complicating the decision-making at the ecb including at the meeting we will get in two weeks time. alix: look at a potentil strike with the big three in autoworkers. are we looking behind the union curve? torsten: it has been coming down more in the u.s.. it's just below 5% and in euro it's a bit above -- europe it's a bit above 5%. in europe it's a bit more worrying because the direction of travel has been more sideways. the good news is last summer inflation did peak in the u.s. at 9% and we are well below that with core inflation at a rate of around 5% or so and headline running a 3% or 4%. in europe w

jonathan: what would the ecb do?president lagarde going into the next meeting noncommittal. the account of the last meeting, any count for that? kailey: -- member supporting between five basis point increase. can any of us really tell by what they are saying? jonathan: the fact that she did not offer anything, nothing in jackson hole, tells you i don't think they know where they are going to go in a few weeks time. the hawks may hold the key to what they're going to do. they sound noncommittal. they're talking about may be more in the future, but not saying in september i'm going to march in and demand a toy five basis point hike. tom: there's complicity because of the war in ukraine, but jackson hole, one of the complexities. another is the united kingdom. the united kingdom is part of the debate. jonathan: we have fed speak to talk about away from the ecb talk. a file bostick continues to side with the doves. maybe a little more careful about what happens next. based on current dynamics in the macroeconomy, policy

that is fuel for the ecb hawks on symptom 14. kailey: we're looking out for inflation data. higher inflation than expected. it speaks to the persistent underlying inflationary pressure in the euro zone, that the ecb will have to be paying attention to. we get the full print tomorrow that will inform what they do in september since christine lagarde is not pre-committed either way. tom: you nailed the algebra. we have a positive real rate and europe has a negative real rate. nothing else needs to be said. jonathan: did you get any indication from the opposition you had with the ecb chief of which way she is leaning? tom: we talked about paris off-camera. the boom in tourism. what it means. we talked about the beautiful summer. she has taken like 12 weeks off. jonathan: is this a long way of saying no? tom: i sense of september 16 but i meant september 14. but you have an agreement before academic conferences. different rules are underplayed. if it was a different interview, --' jonathan: are you saying i'm rude and mean? tom: they

by the ecb and the cleveland fed.e also going to look next at where the fed can go in terms of its inflation fight after that weaker than expected u.s. gdp data. we will also look to the key u.s. inflation data that we get today. the pce, that is next. this is bloomberg. when it comes to getting your flu shot, cvs is pretty... flex. wanna schedule one online while prepping dinner? gravy. avoid the wait by scheduling for you... ...or the whole crew. or if you prefer to just pop in? do you. and if you wanna even tack on a covid-19 vaccine to your flu shot, feel free! and speaking of free? our flu shots are... well... free. really? yes, really. healthier is getting a flu shot on your schedule. cvs. healthier happens together. lizzy: welcome back to bloomberg daybreak: europe. it is 6:43 a.m. in the city of london. u.s. futures pretty flat. let's get you up-to-date on our top stories. bloomberg has learned that tesla's plan to purchase hard to get construction materials is being investigated by ross acute or's. the u.s. i

but inflationary pressures are still very high for the ecb so the question is will the ecb pause.it is the first central banks to kick off the meeting cycle in september so it does have that first move or disadvantage maybe on policy rates but i would say there is expectation that the ecb still has a lot of work to do. a lot more than the u.s. does then the fed does given the inflationary pressures here. we do get boe, andrew bailey, how could you forget. which could be very interesting because that is almost a certainty that the boe will have to hike whether it is a jumbo or no jumbo is the debate right now but i think september the ecb will perhaps diverge. perhaps also pause but we will see. lizzy: the boe looking at hot wage growth, thank you for joining me for this morning's round table. you can get a roundup the stories you need to know to get your day going in today's edition of daybreak. today the lead on asian stocks getting a boost from speculation that the fed is going to pause hikes, they also have a story about dollar bulls having history on their side next month and

what will the ecb do next?oes not mean we are done with interest rates but what we see is the growth slowdown is there, and it is sharper than what the ecb was expecting so far. it will be very interesting to see how the ecb will revised its outlook for growth, in two weeks, probably will be weaker. disinflation is there, it is moderate, there will probably be a trade off between high inflation and decelerating growth, for the september meeting. the growth outlook is deteriorating far more than than what the ecb was thinking. right now and august are you feeling more comfortable about where the eurozone is at seven what germany recently announced in terms of stimulus?— in terms of stimulus? what germany — in terms of stimulus? what germany announced - in terms of stimulus? what germany announced is - in terms of stimulus? what. germany announced is about in terms of stimulus? what - germany announced is about less than one point of gdp stimulus overfour than one point of gdp stimulus over four years. than one p

that has expectations for more rate heights -- rate hikes the fed and ecb. ahead of jay powell's speech, we will also bring you christian the guard -- christie the guard. we will join our asian editor fall dobson. -- paul dobson. take us through market reaction. >> we saw very strong performances in after-hours trading, lifting futures for the whole of the u.s. market as well. taking it over into asia. we have gains for all of the chip suppliers. nvidia commissions a lot from asia. they are having a good day as well. a sea of green. not many negatives to take away from that nvidia earnings. all positives that maybe there would be a supply backdrop. people were worried. it flew by with no problems whatsoever. there is one small seed of doubt. nvidianvidia the buyback that -- the buyback that nvidia is planning on doing. wouldn't it be more prudent to invest? lizzy: maybe nvidia thinks that is a drop in the ocean compared to what they will do. away from nvidia we have a rush of pmi data from the eurozone and uss "bloomberg surveillance: early edition." -- and

because they get asked about it, fed officials, ecb officials -- a lot of ecb officials there.people what they think about also cautioning, we don't know how we will vote because we don't know what the date is telling us. the short term away is it is hard to know exactly what to do now. medium-term to longer was interesting. that was the theme of the conference. there would be a lot of changes in the economic world over the next decade. we'll make it more difficult in some ways or central bankers, but it will be different. when kailey is our age, the issues will be quite different than they are now. trade is changing. housing is changing. tom: the glaciers will have finally pulled back. kailey: looking at not so much the longer term, but the next week, you say the data will be important. jolts, pce, jobs on friday. how indestructible that before a federal reserve try to make a decision, about whether it will leave rates on hold or hike again? mike: pce will be important. even though they target the headline rate, they are following the core rate. we are watching to see what the

said the ecb.ting here today at a time where both the fed and ecb are looking to pause and tandem, what's the case? sarah: we are expecting the fed and ecb will stay on hold next month. for the ecb the problem is is that core inflation remains sticky. we have seen better progress being inflation down in the u.s. compared to the euro area. we know us well the rise in unemployment needs to be more sustained in the euro arrow compared to the u.s. in order to cap wage pressures. the economic data is poor so there is real concern as we move into the third quarter as we approach the final months of this year the euro area growth is being restored. we have information coming next week that will give us a heads up on how q3 is processing and likely to show activity sustained below 50 and that brings some potential risk for the economy. in our view, it suggests that the ecb could afford to pause at the next meeting to allow the policy tightening happening so far to really take effects and the impacts to bec

ecb governing council member mario centeno joining us.omberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh somebody would ask her something and she would just walk right past them. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i started crying. i could hear everything. call 1-800-miracle and schedule your free hearing evaluation today. guy: taking you back to our question of the day. jackson hole. what is the buzz in jackson hole? joining us now is the bank of portugal governor, mario centeno. governor, thank you very much indeed for joining us. we are waiting to see what's going to come out of jackson hole. you are one of our first conversations. what do you think the buzz is going to be? wh

looking for perhaps one more hike from the ecb and inc.england and we will see what powell has to say later this week. we think he will leave the door open to a further rate hike. alix: if the data rules over a little more than we thought -- i feel like the soft landing or no landing scenario, we may need to rethink those phrases. if we do, where is the pain trade? kiran: we think that bond yields have got quite a long way to fall. we've been quite surprised to the extent at which bond yields have remained elevated. despite the optical attraction in terms of yields and clearly they can fall lot further indicates that we see economic data slowing. we think the trait of being long bonds is a good one to have on, in case you see the slowdown. it is important to remember although a soft landing looks likely, it is not a goldilocks scenario we are heading towards. guy: if you are in cash right now, you want to think about duration. how far do you go? kiran: we are looking at the five to 10 year segment is the best positioning. you are looking a

scarlett has recently signed up to an ecb talent i recently signed up to an ecb talent pathway whichampires. do you think more needs to be done to encourage for future assist this. 7 more for future assist this. ? more female umpires _ for future assist this. ? more female umpires generally. i for future assist this. ? ire female umpires generally. especially at the last couple of years, i have shown up, people have said, are you part of the team? i say, i am umpiring. ithink part of the team? i say, i am umpiring. i think it takes people a bit to get used to. but actually, the men have been really respectful. i think seeing females on tv, and in women's sport in general, it had a pity, really. if women's sport in general, it had a pity. really. i— pity, really. if scarlett's ultimate aim is to join _ pity, really. if scarlett's ultimate aim is to join the _ pity, really. if scarlett's ultimate aim is to join the test _ pity, really. if scarlett's ultimate aim is to join the test match - pity, really. if scarlett's ultimate i aim is to join the test match umpire series. i aim is to '

a member of the ecb governing council. take you for joining us here today.ame sort of issue as the u.s. does in that inflation is too high. but the underpinning economies are different. can you give us a feel for what the european economic situation is in relation to rates at the moment. bikes i'm not sure if the situation is different in economic terms. i think the situation is very tout -- very challenging. this is for sure -- it seems to be in europe that the labor markets on the similarities with the u.s. is really pretty good. so we have a good labor market situation, but the economic activity is slowing, this is for sure, but this is not a surprise to me. i think when you're hiking interest rates nine times, it's for sure that the impact here and where we are seeing this, this is good and bad news, inflation is coming down, core is still sticky, so the next month we will get more information about this. likes do you think going into it at this point we would lean towards pausing? there's a split in the markets about it and there seems to be a split in

there is a limit to that, as i said, because of ecb and what's happening in china.lix: we are also seeing u.s. dragging european yields also. the german 30 year is at its highest level since 2014. roukaya: we actually don't think that there is much room for eurozone yield or u.s. yield, for that matter, to rise much further from here and the reason is ultimately, according to our framework drive yield, what happens to policy rates? on this front we believe that in the u.s. in the euro zone central banks have implemented the last rate hikes of the cycle . there is a possibility that the fed or the ecb could hike one more time but that is not the base case scenario so that is going to really limit how much upside there is for german bund yields and u.s. treasuries. guy: what about cuts? what do you think about those? when do you think those come? roukaya: i don't think that either central bank is going to be very eager to cut prematurely. i think that there is still going to be concerned about the inflation outlook. especially as i expect there is going to be slight i

lizzy: where will it leave the ecb and expectations? maria: that is a big question and is an open field. christine lagarde said we could hold our hike and whenever we do, it does not set a precedent going for. it does not single ace -- signal a sequence. we will pay attention to the cpi print and the core number's matter and we will hear a speech from the ecb on friday. that will give us signals to the decision coming up in two weeks. lizzy: maybe christine lagarde will steal the show at jackson hole. great to have you with me maria tadeo. in terms of what is coming up today, we get euro area pmi for august at 9:00 a.m. london time. at 2:45 p.m. it is a u.s. global manufacturing pmi, expected to states and contraction. just for august. after the bell we will get nvidia earnings. the shares hitting an all-time high yesterday on optimism ahead of the results before turning lower. they searched to 12% -- 212% this year. in a sign of positive get this report is going to be the option market is bracing for a movable most 10% following these

we were saying the ecb will have to be watching this very closely.o what extent do you see it as on the back of the tightening that the ecb has delivered thus far? >> it's difficult to disentangle everything, of course. when they complete the questionnaires, they do give us a reason for the cause of the change, we're seeing increasing numbers of companies across the board saying this is the pain being felt due to cost of living across the board and a dump in spending from their clients. so it does look like it's taking an increasing toll, this hike in policy rates coming through and also the specter of more to come is clouding the outlook and causing more uncertainty and dumping the demand. that's what they're supposed to do. the whole point of interest rate hikes is the demand. that's what we're seeing, albeit with a bit of a lag. what we could argue is that in the spring you saw really sort of a false ray of strength with this tail wind from the pandemic lifting growth in that service sector. this doesn't look sustainable. this is going to peter ou

tt2 problem here is a lot of these global condiments, bank of englund, the ecb, the doj, they are notal reserve and this is what's getting a little bit tricky when you look at the economics of the world right now, simply that the federal reserve has historically been known as banker to the rest of the world, the federal reserve slows down and perhaps the bank of england and the ecb will as well. that's not going to be the case this time, i think the bank of england is such a great example because as you pointed out the inflation story is much worse in england and in the rest of the uk, as it is compared to the us or even the rest of the continental europe, that's going to be an issue when it comes to whether or not the bank of england, andrew bailey at the helm of it can really follow the lead that jay powell is setting. whatever ha--ens that jay powell is setting. whatever ha ens in that jay powell is setting. whatever happens in the _ that jay powell is setting. whatever happens in the united _ that jay powell is setting. whatever happens in the united states, - that jay powell is s

i think that suggests perhaps the ecb tightening cycle is not quite done.ey reached their peak they will stay therefrom longer than those in the u.s. guy: where does that leave the bank of england? jennifer: somewhere in the middle also in the u.k. interest rates will stay at their peaks too much longer than in the u.s.. it will probably have one more hike to go in the u.k.. which growths are much stronger than in the euro zone. i think it may be that the u.k. ends up experiencing a slightly deeper recession than the euro zone. that will help to bring price pressures down in the end. tight labor markets again become very weekly bursa pry -- supply. related to long-term sickness. i think this is going to keep wage growth sticky for now in the bank of england cannot ease off. alix: we have seen the data come in better gdp coming in stronger than estimated for the u.k. appeared the longer it takes to get to some kind of slow down where it pushes out those scenarios. the fed can cut more aggressively then the u.k. and europe. guy: the u.k. economy, there is not

there is passive judgment by the markets the perhaps the d.o.e. -- boe and the ecb do not have as much room as a fed for rate hikes. alix: this begs the question, philip, it all comes down to the job market. has this data trickled up to the job market? here in the u.s., chris williamson was saying sort of but not yet. maybe hiring has stopped. the about in europe? -- but what about in europe? philip: the job market is still hot in the europe and the u.k. it is not showing up in big falls in wages. at the moment, this is the problem. andrew bailey and his colleagues have to get on top of this problem, both service inflation and wagers, which are growing faster than is tolerable. this pmi data gives them an argument. they have got to see inflation data and jobs market easing a lot for them to definitively pause. but this is why they are jumping for joy. at least they can make an argument, where as before they had rate rises. alix: appreciate it. coming up, more on what the latest pmi data spells for monetary policy. we will get ralph schlosstein's take. this is bloomberg. ♪ ♪ (upbeat mus

jonathan: the ecb is going to hit pause in september.ing further into contraction territory for the last month. lower with higher rates hitting demand. in germany, i think what might get your attention is what is happening in manufacturing. manufacturing in europe is now coming up to services. tom: i believe it is a friday or saturday speech. i mean what does she do, she has got to rewrite it. i mean, the entire ecb takes off six weeks. that is the way they do it. are they in st. tropez or whatever rewriting the script? tom: i can't wait to see if -- seizing on friday? ups, the workers approving the $30 billion labor deal. roughly 86% of employees voted yes. i want to hear who said no. the five-year agreement will go into effect after a local florida affiliate. big deal over at ups. big deal over american airlines as well. let's see if that changes. tom: i guess they are trying to move forward there. based on what i seen on twitter, it is a challenge to say the least. would like to focus 30 minutes on a theme. the em and the market dynam

eases this week, perhaps the ecb will be inclined to take it the foot off the gas.have green across the board here. this as china halved the stock trades after a major share index fell to a nine-month low last week. this is the first cut since 2008. the finance ministry is cutting the levy on trades to invigorate the capital market and boost investor confidence. so far, it has boosted investor confidence. shanghai trading 1% higher. at one stage, it was 5.5% higher overnight. we hhave pared back the gains. frank, back to you. >> julianna, thank you very much. julianna tatelbaum live in the london newsroom. >>> wall street assessing what is ahead for the interest rate increases following the jackson hole symposium. the cme fed watch tool pricing in an 80% chance of pause at the september meeting. that is down from the report on friday before the remarks from jay powell. the economic growth and consumer and resilient jobs market be an he main takemaintakens the 2% - maintains the 2% target. >> we are committed to achieving a monetary policy that is sufficiently restri

the increase in the interest rate from the ecb has a clear negative impact on the german constructionector indeed. >> given the ecb has maintained it is data dependent and there may be more rate hikes in store, what does that suggest about the overall german economic outlook? >> taking a look over the next months or quarter, the german economy will grow along the zero growth line. maybe a slight negative growth in the third or fourth quarter. the stagnation will continue. i would not call it stabilization as the german office said today. we have a mild recession. this will continue over the next month. >> klaus, throughout the course of the energy crisis, the german government introduced specific aid targeted at businesses and consumers most exposed to the energy crisis. to what extent does it help cushion the numbers in the last 12 months and what is the outlook going into next year when some of the support may not be there? >> it is a good question. economic policy has done a good job last winter with the fear of cutting gas supply from russia or other sources. that turned out quite

mathieu: the ecb has been liking to a certain extent, the fed has been quicker to react the past fewuarters but by the same token, the leverage market you are talking about starts from a different standpoint in the u.s. and europe erie if you tick the private credit markets for example, you have public data that is average of the private market leverage in the u.s. at 6.5 times. in europe, is more like i .5. managers like us are more 4.5 so it is how do you enter the cycle, how do you enter this cycle in terms of liability, in terms of debt, and today when the ecb is catching up and they have to come a look at the most recent data that came from germany and production of salaries, they have to catch up somehow. so they are suddenly operating in isolation today but from an investment standpoint, it is a great market to be in to navigate both sides of the pump. as the market reopens and you have these massive beats from investors to compound, now when you can factor -- effectively land at that 10%, that is what people want, give me 10% for the next 10 years. people have been talking ab

i want to carry on to italy, the ecb preparing a letter criticizing the government's bank tax.y are counting on 3 billion euros from its controversial measure. joining me now is maria tadeo. talk us through this latest development. maria: we have a report today in an italian newspaper that says there is a letter from christine lagarde that is on its way to the italian government. according to the newspaper, the european central bank has reservations in terms of the way the windfall tax, the decree announced by the italian government last week of a 40% windfall tax that would be limited. it would be capped at 0.1% of a bank's asset, but italian banks are rocked that day and the market sold off. this report suggests the european central bank could send the italian government a letter expressing reservations in terms of the way this windfall tax was announced. we should make it clear the italian government has the right to do what they feel is necessary, but it is understood normally there is communication between the national government and frankfurt and ecb because the european

i mentioned that ecb survey.sts say the ecb will deliver one final increase in interest rates next month. this is according to bloomberg school and it says the deposit rate will be lifted to 4% in september. at the same time, respondents reckon officials will start cutting borrowing costs next march, a month earlier than they previously thought. now, pimco founder and former cio, bill gross, said stock and bond markets are both overvalued and bullish investors have got it wrong. he spoke to bloomberg about his outlook for markets and inflation. bill: i think there is a case for 3% inflation going our plus or minus. i think if we got to that point, then the fed would again to consider stopping and maybe even lowering rates over the next year or so but i do think the 10 year, you know, it's probably overvalued and has been overvalued for a long time in terms of a lower yield and too high of a price. you know, if said funds actually came down to 2.543% the 10 year term premium that is the spread between 10 years and

on tuesday, the ecb releases its consumer expectations, export survey and then on wednesday will get pmi and ppi data. later in the day we will be watching the disney earnings. on thursday it is uscp i. the prior month's report showed a rise of 3% from a year ago. that is the smallest increase in more than two years. at the end of the week, we get u.k. gdp and u.s. ppi. all of that to come this week. coming up, the israeli prime minister tells bloomberg he is pulling back on his judicial revamp plans. we will have more of that exclusive interview for you next. this is bloomberg. ♪ >> welcome back. israel's prime minister says he will not pursue entire judicial overhaul of -- originally planned by his government. he will only work to change the makeup of the georgia selection committee. the israeli leader says his nation and saudi arabia will deepen economic business relations even if they don't formally recognize each other. he spoke exclusively to francine lacqua in jerusalem. >> it tells you why i am very optimistic about israel. one of two reasons. one of two main reasons. one is

saw yesterday becomes more aggravated if strikes go on in australia longer, it could put the on the ecb come september. dani: got something they will welcome as they are battling inflation. a 28% surge. valerie tytel setting us up for the day. let's talk about disney, those shares are lifting the overall futures session. they gained 6% in after-hours trade. they came in from that on positive earnings. let's bring in jill to break down the earnings. you are a disney reporter veteran, so we have to talk about it. most of the positivity was around cost and reduction of costs i should say, is that fair? jill: there is a couple things investors looking at that is positive for earnings read it is that 3 billion dollars in cost savings disney flagged. they were expecting to spend $30 billion on content this year, now it is somewhere around $27 billion. a big part of that is due to the actor and writer strikes in hollywood, and they have to move projects to a different time, helping them save money for now. the other thing to flag is if you look at some of their online video losses, they are do

rishaad: let's have a look at ecb president christine lagarde saying that the ecb will be paying close to wage development on the continent as it seeks to bring inflation back to target. speaking to us exclusively at jackson hole, lagarde also weighed in on protectionist measures across the globe, calling them a cause of concern. >> it is a worrying situation. if you look at the number of protectionist measures that are being engineered, implemented around the world, if you look at the volume of trade, whether it is pure volume on momentum, it is either stable or on the decline. and the fragmentation is something that is much talked about that we are now beginning to see in terms of investment, in terms of market penetration by various companies around the world, and the control of f foreign direct investmentdi,, in many countries, is now being scrutinized in a more thorough way. so we are seeing -- not deglobalization -- but a much more guarded, much more careful target of supply chain development, of setting up foreign investment abroad. the purpose of those investments are different

have to do more, but also equally plenty of reasons why the ecb has to do less. a rock and a hard place for president. lagarde kit jukes actually put it really well. why isn't the euro lower? right? the fact that we're seeing euro strength on a day like today when the european economy is that much more linked to china is a head scratcher and there is a real question of whether the ecb is going to be able to hold rates where they are sooner or simply because there isn't the same kind of growth in inflation coming from china. it's your top story today under surveillance. this morning, china's central bank unexpectedly cutting the rate on its one year loans by the most since 2020. economic activity in the country not great. the us treasury secretary janet yellen, calling china's slowdown a, quote, risk factor for the us economy. i actually think that comment right there, lisa, is quite interesting how much of a risk factor is it? dan solis was on the program with us just a moment. dan greenhouse of solus alternative asset management, who love that new name. dan soli

local time according to the ecb.the harder message to give at friday's jackson hole symposium? >> if you are looking at those central bank governors, christine lagarde has a harder balancing act to fulfill. chair powell in the fed are geared toward data dependence and they are the reason around inflation and employment data, all the upcoming decisions. he can maintain this in terms of looking at the data and reacting accordingly. from the ecb perspective, there are concerns regarding the headwinds in terms of the manufactured sector and it reflects to what we are seeing in china and they service sector under increasing pressure. we will no doubt see that demonstrated in terms of my data on wednesday. and bottom lagarde will be speaking after the iphone. and it's also in terms of downturns, the differentials among the governing council and the need for additional policy typing will become more strange. that is going to test charlie guards political credentials as well as monetary ones as we head toward the september e

we are no longer undercapitalized and no legacy epls the ecb has actually become the bull using the stressests and another one last week to essentially sanction higher and higher capital returns and share buybacks and hsbc was another one today. that capital return to shareholders also cushions the downside for the sector as growth slows down. i think consistency and this realization that the downside is fairly limited compared to the past those will be the factors that bring in new investors over time. >> viktor, i appreciate the time interesting thoughts thank you for joining us here in studio viktor, the global head of credit and equity and derivative strategy at bnp paribas. >>> and on to the alcohol space. diageo has a full operating profit for here at over 17 billion pounds the british drinks giant expects cost pressures to continue to 2024, but net sales will accelerate in the second half with the challenging environment. the ceo told cnbc consumers are continuing to spend despite high prices >> we see this as a strong set of results our organic net sales were up 6% organic operatin

europe started tightening -- monetary policies as well so that is not changing expectations for the ecb to hike again this fall. inflation pressure is maybe abating because economic growth is a slowing and european growth is more cyclical and more tied to the rest of the world. given what we are seeing in china, does that mean maybe europe will see demand and growth slowed more than expected? guy: a question i am try to figure out, is rates -- is our rates going higher? or is this a supply-demand balance story? there are going to be fewer sellers and buyers. there will be more supply coming through. everybody is trying to raise money because governments are going to be stretched. that ultimately means yields are going to be high. justina: it is the real yields that moved up. one positive interpretation. -- part of it could be the researcher. alix: we will see more money pumped in with the green infrastructure. what is the biggest reallocation? nour: that is an excellent question. we are not, treasuries upping their demand big -- their supply because of the structural demand. the need fo

this is how i have been operating at the ecb.policy is really european monetary policy is a plus. we are bound by the same currency, the euro. we exchange the same bank notes be digitally one day. haidi: ecb president christine lagarde speaking exclusively to tom keene. we have more to come on daybreak asia, this is bloomberg. ♪ i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app. can i sleep over at your new place? can katie sleep over tonight? sure, honey! this generation is so dramatic! move with the xfinity 10g network. higher bezawada. he was among those speaking from jackson hole on friday and essentially saying that the inflation story in japan, because we've just been really monitoring that perhaps more of a weakening trend, at least on the headline level, really telling us that it does back the case

we've had some leaks this morning, from the ecb sources.ggests that the arguments are filled in for a pause. but nothing is decided yet. five bucks will get you a cup of coffee. these days, or four euros or five euros. whatever it is. i guess the question is, in your opinion, was the biggest paid for market. we saw that the yield spike higher and we felt the pain. is it treasuries? is it the dollar? is it the end? i am curious to hear your thoughts on that. >> i guess the rejoinder question is sort of a short-term trader or --. >> yes. >> investors tend to have a portfolio, so obviously, the biggest trade in that regard is as set prices, consuming the fall. the equity rally this year, i think that took a lot of people, including myself by surprise. not only in how it shot out of a cave, but what we have seen. i think at this point, giving this position, the biggest pain trade out there would be technology going back to where it was 12 months ago. i think the reaction to yesterday's nvidia earnings which are up, clearly, barely -- very good.

we think that is possibly the last rate hike by the ecb.he little market pricing left will be disappointed. we are pricing less than one rate hike now. but that is a drag on the euro. if equities go to 5000, like your previous guests were talking about, only weighs the dollar weakness in that environment. lisa: how disruptive could higher oil prices be given the disruptions and costs on carriers echo -- carriers? jordan: that is my biggest headache. before this oil price rally, energy was down 40% year on year. if i had stated those levels before this rally, it would have drag down you have cpi. now we have seen retail gasoline prices in the u.s. picked up by 5% or the end of july and it could go further. if we break $19 a barrel in oil, central bankers will be too cautious and they will say we don't need to discuss about cutting rates. we need to stay higher for longer or even surprise for an over hike this year. the fed needs to be outdone but if we get oil to $90, 100, that is a mixture of supply concerns probably due to demand picking b

to lisa's point, you've got the ecb talking about maybe being done.ughts the bank of england is close to that point. the federal reserve made this 25, 50, they are almost done. the rest of the world, emerging markets have started cutting. chile, brazil, others will follow in 2023. lisa: brazil is cutting to 13.75%, coming down significantly to something that is still significant. you raise a great point. at what point does the carry trade not work anymore? do these higher-yielding currencies hold less luster and drive a shift back to the developing market? you are not seeing people go into those currencies as a result of this. tom: where we are now versus the third week of december last year, did we have any greater clarity then we did then? i do not think we do. we are farther on from the pandemic. we are farther on from a medical disaster. i guess there are things we can believe in, like barbie. the bottom line is, why do we have certitude now about the view that q4, q1 of next year? i do not know where that comes from. jonathan: me too. the team at

it said women were paid 25% of men's fees for white—ball and 15% for tests by the ecb. to see". it is another really good step forward for the game. we want to thank them again for taking us to this point. it is great, isn't it. it is kind of a reward for what has been a remarkable tournament and you talk about the women's game playing a really big role in the sport and putting the women's game alongside the man is all backing it up notjust with words but actions as well. and revenge is a dish best served cold. twelve months on from being eliminated by rangers at the same stage, psv eindhoven will be dining at europe's top table this season, after thrashing scottish side to book their place in the champions league group stage. the two teams started the second leg all square. but a dominant display from the dutch side saw them cruise to a huge aggregate win, 5—1 on the night, so 7—3 over the two legs. in the other fixtures, belgian side royal antwerp are through to the group stage after they beat greek side aek athens 2—1, 3—1 on aggregate. while danish champions fc cope

scarlett has recently been signed up to an ecb talent pathway that aims to develop a new generation ofs to be done to encourage more females into the sport? people aren't used to seeing young female umpires in general, really. i've had, especially the last couple of years, i turned up and people would be like oh, are you part of a team? and i am like i am umpiring. i think it has taken people a lot to get used to, but actually the men have been really respectful. i think seeing females on the tv and just in women's sport in general is just eye—opening, really. scarlett�*s ultimate aim is to join the professional umpiring circuit. would love to do a test match. the hundred would be very good as well. my goal is to show people you can do more than just play cricket. finally, some basketball for you. james harden has been fined $100,000 by the nba for saying he won't play for the philadelphia 76ers while president daryl morey is in charge. harden called morey a "liar" in an interview after reports the 76ers had ended talks about trading him. the 33—year—old was reportedly keen to join the

i think what she signals about the ecb is done or needs to do more is interesting. thing we are hearing from patrick harker and everybody here is the question about how do you know when you have done enough? he was clear on his interview with you yesterday that the moment to pause and wait and try to figure out the data coming in and assess what is happening next. i think around the world, we are doing that for the next couple months. what ware the markers that make you feel good and confident that the inflation will come down. that will be a point of conversation. >> jeanna, we saw the selloff before the close yesterday on the anticipation of what jay powell would say. is this as big of an inflection point? we have jobs reports and other things coming up before the next fed meeting. >> i think it is a somewhat open question. this could be the inflection point. that is the case. we could be done raising interest rates and look back at the jackson hole speech and say that was it. we were over at that point. there is also a world in which the economic data comes in st

haidi: that was the ecb president christine lagarde's taking exclusively to tom keene at jackson hole s economy is also being affected by the slow down and china like other parts of the world. let's discuss with annabelle. this is not the way that the chinese economy was supposed to contribute to global growth this year. annabelle: that is right, i think it is so interesting when you talk about january and so much of the discussion was that china was going to be really powering will growth over the course of 2023 and offsetting what was supposed to be a slow down, particularly in the u.s., but the reality has been anything but that, because we have continued to seem the signals of strength in the u.s. economy coming through, that resilience of the best consumer. and then at the same time, the story of china has been so much of that weak sentiment coming through and the recovery that just failed to materialize. so this has been a major talking point for economist, given that there was an expectation that china would power 1/3 of global growth over the course of the year, but the impact

ecb minutes in the middle of the week and then we will get drips of eurozone inflation numbers.his is going to be important data for the ecb and determining what they will do in the september meeting. they heare leaning toward no hikes, but it can change. something to watch out for this week. let's talk more about what happened in the asian market session. a lot of green on the board. the knikkei up 1.7. shanghai is up 1.1. it is rare that walk in in the morning to see green overnight. the reason is china announced they are having a duty on stock trade after a major share index fell to a nine-month low last week. the finance ministry is cutting the levy on trade to 0.5%. a greater chinese market is up on the move as you can see. positive reaction there, of course, and reaction to the announcement. on the flip side, we continue to watch the property sector. look at the evergrande shares. down 80% on the first day of trade following the 17-month long suspension. the shares of the property group resumed trading and guidance by the hong kong exchange to avoid de-listing if it reache